Kwasi Kwarteng: Cutting taxes is ‘sound, credible and will increase growth’

Kwasi Kwarteng will unveil a “promise” to the British people that his controversial tax-cutting plans are “sound, credible and will increase growth”.

Delivering a make-or-break speech to the Tory conference in Birmingham, the embattled Chancellor will tell delegates: “We must stay the course. I am confident our plan is the right one.”

In a bid to reassure the markets who were spooked by his mini-Budget last month, the Chancellor will pledge an “iron-clad commitment to fiscal discipline”.

“We will show that our plan is sound, credible and will increase growth – that is my promise to the people of this country,” he will say.

Mr Kwarteng’s mini-Budget triggered turmoil in the City, was criticised by the International Monetary Fund and resulted in a £65 billion emergency intervention by the Bank of England to restore order.

His plan to axe the 45p income tax rate for top earners and scrap the curbs on bankers’ bonuses at a time when many households face a cost of living crisis has been condemned by political opponents and Tory critics.

But the Chancellor will tell activists on Monday that his plans were vital to avoid a future of “slow, managed decline”.

He will insist the gamble made by the Tories to cut taxes and axe red tape in the hope of increasing economic growth to an annual trend of 2.5 per cent is the correct approach.

Mr Kwarteng will say that “major currencies” are “wrestling an incredibly strong US dollar”.

“I refuse to accept that it is somehow Britain’s destiny to fall into middle-income status or that the tax burden reaching a 70-year high is somehow inevitable,” he will say.

“It isn’t, and shouldn’t be. We needed a new approach, focused on raising economic growth.

“That is the only real way to deliver higher wages, more jobs and, crucially, revenue to fund our precious public services – and it is the only way to achieve long-term fiscal sustainability.

“We must stay the course. I am confident our plan is the right one.”

Setting out his “new economic deal”, he will attempt to convince lenders that he has a plan to manage the Government’s debt with an “iron-clad commitment to fiscal discipline”.

The Government will be “wholly committed to economic growth”, delivering "more businesses, more jobs, higher pay” and ultimately “more money for public services”.

Mr Kwarteng will say: “You cannot have a strong NHS without a strong economy. You cannot have good schools without a strong economy. You cannot have quality infrastructure without a strong economy.

“With this plan, we are aiming for 2.5 per cent annual trend growth. We did it before. We can do it again.”

The Chancellor will conclude: “Even in the face of extreme volatility in global markets, with major currencies wrestling an incredibly strong US dollar, and longer-term trends from demographic change to climate change, we will show that our plan is sound, credible and will increase growth.

“That is my promise to the people of this country.”